LOL, nice post mokwit. I was waiting to see how long it would be before you got called bullshit on the Bloomberg retail order thing. But, excellent post in actually providing the OP with good information. I always laugh when people are convinced that there is a conspiracy, and that somehow 'they', whoever' they' is, see their stop orders and always move the markets to stop them out. I think you did an excellent job in explaining why stops get, and debunking the fallacy that somehow the market is out to get those who use stops. It's not the use of stops that causes the problem of getting 'taken out' for most people, it's the placement of them.
Here's an additional rub. If the market becomes so imbalanced then stops will get hit no matter where they are. That's why we've seen in the past month or so, how many? Perhaps 4 close to 400pt up days? Uncommon vol to the upside. Why? Because the market becomes so oversold that as the first stops are hit there's an absence of new available shorts to fade the stops and then cause prices to auction lower. IOW's if there's a boatload of shorts and the longs en masse are only sellers at much higher prices then fading the buy stops mid range is death. Everyone seems to remember when they're stopped on a day's extreme but often your stop is judicious and the market keeps right on going. Those are important trend day indicators.....
I'm having trouble following this, would you care to elaborate? You're saying....if there's been heavy selling pressure, then you don't want to re-short on a retrace?
Here's the problem. We don't know if the "heavy selling pressure" is liquidating longs or new shorts. If longs are getting out then yes one wants to sell up ticks. If instead the market is attracting short sellers and there's a lack of long liquidation then the shorts will become trapped (after all who do the shorts need to cover off) and weak shorts equal bat out of hell short covering rallies.
Lol...You'll notice that I'd edited out that question moments, apparently, before you answered it, as I realized that this, indeed, would be the case. Cheers.
Absolutely agree. You can just see it happening. You try to short what seems like a legitimate resistance point, just for a short scalp, maybe more, slight pull-back, really slight, then you get ripped a new asshole if you stick around too long. It is so frustrating. Everytime you think you have a good spot, boom. It quickly becomes apparent that there is an absence of long sellers , and the broken resistance causes trapped shorts to bail, stops start getting hit, sellers pull away in anticipation of higher prices, and the squeeze continues with more longs pushing it as it goes and people panicking thinking they missed the reversal.
You and I can't. I don't know about you but I can guess. However, there are others who know for certain including the 'pc' as you call them